Hesai Group Q1 FY2025 earnings call

• Hesai began 2025 strongly with momentum in ADAS and robotics, seeing shipments triple and net revenue jump 50% y/y, net loss reduced 84% y/y. - Ranked #1 global leader in automotive LiDAR market share by Yole Intelligence for 4th year. - ATX LiDAR secured design wins with 12 major OEMs, entered mass production in Q1 with ~40,000 units shipped, and has a landmark order for 200,000 units from Leapmotor. - Internationally, achieved breakthroughs like design win with European OEM, POC with Japanese tier-one supplier, and 5 POC programs with global OEMs/tier-ones, 3 completed in Q1. - Launched Infinity I LiDAR solution with 3 configurations for different autonomy levels. - Robotics segment powering mass-produced fleets for Baidu, Didi, etc., and JT LiDAR for robotic lawnmowers with partnership for 300,000 units. - US District Court dismissed Ouster's patent infringement case.

In the first quarter, Hesai's ADAS and robotics segment showed strong momentum. Shipments more than tripled year over year to nearly 200,000 LiDAR units. Net revenue jumped almost 50% year over year. The net loss was reduced by 84% year over year. For the ADAS segment, ATX LiDAR entered mass production in Q1 and had close to 40,000 units shipped in its first quarter on the market. The robotics LiDAR shipments were nearly 50,000 units in Q1 with over 600% year-over-year growth. Revenue contribution: ADAS and robotics segment drove the significant growth in net revenue.

• Q2 net revenue expected between RMB 680 million and RMB 720 million, a 48% to 57% increase year over year. - Q2 shipments expected to be over 300,000 units. - 2025 revenue guidance: RMB 3 to 3.5 billion, shipments 1.2 to 1.5 million, gross margin ~40%, GAAP net profit 200 million to 350 million. - Q2 expected to be GAAP breakeven.

• Tariff environment risks, with potential impact on revenue timing and cost adjustments. - Geopolitical risks, but overseas manufacturing plans in Southeast Asia to mitigate these risks.

Q: Regarding full-year guidance and ADAS LiDAR ASP trend, how is the 2025 guidance maintained and what's the outlook for gross margin?

A: Andrew Fan stated that 2025 revenue guidance remains RMB 3 to 3.5 billion, shipments 1.2 to 1.5 million, gross margin ~40%, and GAAP net profit 200 million to 350 million. Q2 revenue expected RMB 680-720 million, shipments over 300,000 units, ATX LiDAR ramping up with GP margin expected around 40%, and Q2 expected to be GAAP breakeven.

Q: About competition and new products like Infinity I, concerns about reshuffles and details on Infinity I's mass production, value content, and margin?

A: Andrew Fan said they don't comment on market speculations, and Hesai has a competitive edge. Regarding Infinity I, it's a full stack of L2 to L4 LiDAR solutions with flexibility, each configuration tailored to different needs, and gross margin targets remain healthy as designed.

Q: Impact of Trump tariff on pricing, supply chain, and full-year outlook?

A: Andrew Fan said direct exposure to tariff is limited, U.S. market accounts for 10% of revenue, 5% of revenue is under DDP terms, and they have levers to absorb costs. Full-year revenue guidance unchanged, Q2 guidance range due to order front-loading/rescheduling, and tariff impact on full-year margin and profitability is immaterial.

Q: Dual listing plan in Hong Kong and NASDAQ listing status?

A: David Li said no comment on dual listing speculation, but they evaluate options to protect investors. No legal risk of delisting from NASDAQ as per SEC compliance counselors.

Q: Impact of AEB draft on LiDAR industry and outlook for operating efficiency improvement and CapEx?

A: David Li said AEB draft drives faster LiDAR penetration. Andrew Fan said full-year CapEx expected $30-50 million, OpEx managed to save RMB 100 million, R&D investments relatively stable with operating leverage, and international ADAS business early stage.